Political Investing Not Driven by Big Names

While big names and celebrities may drive traffic to a charitable website, they are not so effective at creating donations, a study shows. Recommendations from family members and friends are the more important influencers. The study researchers also evaluate charities by their financial health.

NPC's philosophy is that it is the results that an organization can deliver that are important for its evaluation. That donors want to see a real return on their political investment PROI. When donors see how they can personally make an impact on the issue that concerns them - they are sure to stay engaged, continue to give and tell their friends how they did it!

Aristotle on PROI™

Aristotle recognized that political and charitable giving could be difficult and overwhelming:

"To give away money is an easy matter and in any man’s power. But to decide to whom to give it and how much and when, for what purpose and how, is neither in every man’s power nor an easy matter. Hence, it is that such excellence is rare, praiseworthy and noble."

Giving Well is Harder Than You Think

Givewell has received great coverage lately. (2 Young Hedge-Fund Veterans Stir Up the World of Philanthropy - New York Times and Doing Due Diligence on Your Donations-Wall Street Journal.)

We love that these guys are thinking about how to help individuals decide on how to spend their charitable and political dollars. It's clear that it is a problem to only look at the financials, or to simply look at qualitative data. Our position is that there is no one magical piece of information—just like there isn’t one in the stock market. If there were, we’d all be investing in the same four companies. Instead, we want to provide the necessary information that our customer needs to take an intelligent risk and make an impact in an issue or field they care about.

NPC "Political Mutual Funds" Launch

Check out our press release below:

SAN FRANCISCO--(BUSINESS WIRE)--Nov. 19, 2007--Giving to political and charitable organizations no longer has to feel random, reactive, or confusing. Today, New Progressive Coalition, LLC (NPC), an online political giving advisor, introduces its first "Political Mutual Funds," which are unique and powerful portfolios of organizations that are working to address three pressing domestic challenges: energy independence and the environment, health care, and nonpartisan civic engagement and election-related issues.

NPC found that its customers were overloaded with donation requests and didn't know which organizations were effective or how to make strategic contributions. NPC researches, evaluates, and selects organizations for each of its funds so that its customers don't have to. With one click, the actively managed funds provide an easy way for citizens to harness their collective power and make a strategic impact without having to navigate the complex political and policy landscape.

"Individuals are searching for a way to make an impact that is more strategic than just responding to an email asking for money," said Kirstin Falk, CEO of NPC. "People want to see how their contributions translate into action and our 'Political Mutual Funds' do just that."

More than 120 organizations from across the country applied to be included in NPC's first three "Political Mutual Funds." NPC used its proprietary Political Return on Investment (PROI)™ methodology to analyze organizations and determine the success of their specific goals. The final holdings of each fund were then selected by NPC with guidance from leading issue-experts.

"During the current U.S. presidential election cycle alone, billions will be spent by the campaigns and countless independent organizations," said Andy Rappaport, a noted Silicon Valley venture capitalist and political donor and, with his wife Deborah, the major investor in NPC. "By providing a mechanism for every citizen to make informed decisions about where to make donations, to measure and track the effectiveness of these donations, and to be able to join with other contributors to have a real impact no matter what they can afford, NPC is contributing in a very real way to welcoming citizen participation back into the political and policy making process."

Progressive change requires investment. Remember what happened in the 1990s when the small investor got access to financial research and expertise? A whole new wave of individuals became investors. Just as companies like Charles Schwab provide investment research, analysis, and portfolio management, NPC provides the same services in the political and public policy arena. NPC's "Political Mutual Funds" are continuously managed. Depending on the performance of the first round of holdings, or to take advantage of opportunities that arise, organizations may be added or removed to improve the "political return" of the fund. Contributors will have access to "Impact Reports" in order to constantly monitor how their contributions are making an impact.

As of today, NPC is introducing the following "Political Mutual Funds":

The Energy Independence & Environment "Political Mutual Fund" invests in organizations that work to ensure a greener planet and an energy-independent country. Organizations in the fund include: Arizona League of Conservation Voters, Ella Baker Center for Human Rights, Energize America, Energy Action, Green Corps, Institute for America's Future, League of Conservation Voters, Rainforest Action Network, Science & Environmental Health Network, Vote Solar Initiative, and Western Organization of Resource Councils.

The Health Care "Political Mutual Fund" invests in organizations that are moving the United States towards an affordable and accessible health care system. Organizations in the fund include: America's Agenda Health Care Education Fund, Campaign for America's Future, Consumers for an Affordable Health Care Coalition, Herndon Alliance, Progressive States Network, Small Business Majority, Tennessee Justice Center & Tennessee Health Care Campaign Collaborative, and Universal Health Care Action Network.

The Victory in 2008 & Beyond "Political Mutual Fund" invests in organizations supporting progressive policies and infrastructure. The 501c(3)s listed engage exclusively in nonpartisan voter education and civic engagement activities. Other organizations support candidates and progressive policy change. Organizations in the fund include: 21stCentury Democrats, ActBlue, Ballot Initiative Strategy Center, Bus Project, Democracy: A Journal of Ideas, Democratic GAIN, Faithful Democrats, League of Young Voters, Mainstreet Moms (the MMOB), MAPLight.org, Media Consortium, Netroots Nation, ProgressiveU.org, Take Back Red California, Voter Action, Wellstone Action, Women's Campaign Forum, and Young People For.

About NPC
Using a financial services model, NPC acts as a political giving advisor by providing its customers with products and services to target their political and charitable time and money more effectively. Behind NPC's products and services is its proprietary Political Return on Investment (PROI)™ methodology. The PROI™ methodology helps individuals understand the impact of their investments while also promoting transparency and accountability among organizations.

More information about NPC is available at http://www.newprogressivecoalition.com/.

Political "Mutual Funds": Third-Party Verification

As we worked to develop our PROI™ methodology over the last 18 months, we were often asked, “If organizations are reporting their own PROI™ data, how will you be able to make sure that it is accurate and they are not making up or exaggerating their data?”

Data integrity is a legitimate concern. To address this, we instituted an independent data verification process. Every organization that is selected to move on to our final round of the Political “Mutual Funds” application process will have its PROI™ data independently verified by our partner, Social Venture Technology Group.


While not every piece of data is audited, the verification process tracks the source and credibility of the reported data. It also verifies that the data is a reflection of the organization’s work. Based on the results of this independent verification, SVT Group will assign one of three ratings to each organization: 1) Data verified with no concerns; 2) Data verified with some concerns; or 3) Data provided could not be verified.

Stay tuned… Next week we will be announcing the organizations that made it to this final round of our Political “Mutual Funds” application process.

PROI™ Data Crunch

I’ve been meaning to blog about how we are building out our Political “Mutual Funds” for a few days now, but I have been in Excel and Access hell trying to analyze all of this PROI™ data (along with our VP of Engineering, who gave up many late hours and a few Sundays to be my de facto tutor). In the end, after many near-breakdowns, we successfully analyzed data for over 65 organizations who took the time to collect and report on a combination of nearly 800 quantitative and qualitative fields.

It was pretty remarkable to see that the data collected can really help you understand the characteristics of these organizations, at both micro and macro levels. Are they start-ups? Do they attract volunteers? Do they have seasoned staff? Do they have the potential to be game-changing? Have they been effective in the past?

You can also start comparing their data with other organizations in their sector. What organizations have the highest rate of electoral victories? Who’s been especially effective at persuading people? Who has a healthy overhead ratio? You can even start to see trends within each sector. For example, we are seeing that that infrastructure/capacity building organizations in this round tended to have higher overhead ratios than electoral ones.

The process hasn’t been perfect. We have had to scrub, and even throw out significant amounts of data because some of our questions were not clear or, for example, organizations entered “lots” when we asked how many volunteers they had. This data analysis process also highlighted the difficulty that some organizations have in even keeping track of certain types of information that our customers need to make decisions.

The Working Group is meeting this Friday to confirm that our methodology and process is sound. We are also recommending to the group what organizations should go on to the next round, at which point SVT Group will independently verify the credibility and sources of their data. Based on the PROI™ analysis, SVT’s verification, and guidance from the Working Group, we should have the “final holdings” for our first Political “Mutual Funds” ready soon.

How to Balance Confidentiality with Transparency

A lot has happened since our open call for applications for NPC’s three Political “Mutual Funds” in August. Overall, the response from organizations about our PROI™ methodology (used as part of the selection process) and the application process has been incredibly positive.

• 124 organizations submitted the initial application for the funds.
• Of these, 102 attended web-based orientation sessions hosted by NPC and partner SVT.
• More than 80 organizations have expressed their intention to officially go through the PROI™ analysis (see below).

The question of confidentiality and security has emerged as a key concern for some organizations. Organizations have cited concerns involving competition, opposing groups, or potential investors seeing their data. Two organizations have decided not to go forward because of confidentiality concerns. Understandably, they don’t want the display of their information to hurt them.

Although the actual data will not be immediately visible to the public, we will be adding the ability to display our PROI™ analysis to the Progressive Directory in the near future. We understand the hesitancy to share this type of information and are taking confidentiality concerns very seriously. At the same time, though, donors have consistently told us that the lack of transparency is one of the key issues that prevents them from being active investors in organizations.

Our Working Group came back with a suggestion:
Once we add the ability to display our PROI™ analysis, organizations will be allowed to opt-out of publicly displaying detailed PROI™ information. NPC will simply communicate that these organizations chose to not release their information.

So, what do you think?

1. Should organizations be able to hide all or parts of their data or analysis?
2. Does allowing organizations to withhold certain information hurt the goal of creating a more transparent process when we know that lack of transparency is one of the key barriers to entry for investors?

Keep the feedback coming.



Organizations participating in PROI™ for the Political "Mutual Fund":
ActBlue
America Votes
American Medical Women's Association
Arizona League of Conservation Voters
Ballot Initiative Strategy Center
Bus Project
Campaign for America's Future
Campus Climate Challenge
Center for Rural Strategies
Citizen Action of Wisconsin
Colorado Conservation Voters
Commonweal Institute
Conservation Council of North Carolina
Conservation Voters New Mexico
Consumers for an Affordable Health Care
Defenders of Wildlife Action Fund
Democracy: A Journal of Ideas
Democratic GAIN
Drum Major Institute for Public Policy
Energize America
FairVote
Faithful Democrats
Forward Montana
Health Action New Mexico
Healthcare for All Pennsylvania
Herndon Alliance
Institute for America's Future
Into the Blue
Justice Through Music
League of Conservation Voters
League of Conservation Voters (WA)
League of Conservation Voters Education Fund
League of Young Voters
Mainstreet Moms
Map the Vote, LLC
MAPLight.org
Media Consortium
Montana Conservation Voters Inc.
My Rural America Action Fund
Netroots Nation
New Leaders Council
New Voice of Business
Non-Profit Voter Engagement Network
Northwest Health Law Advocates
Ohio League of Conservation Voters
Oil Change International
OMB Watch
Party2Win
Progressive America Fund/Open Ballot Project
Progressive Majority
Progressive States Network
ProgressiveU.org
ProgressOhioEducation, Inc.
PTP: Progressive Technology Project
Rainforest Action Network (RAN)
Science & Environmental Health Network
Secretary of State Project
Sierra Student Coalition
Small Business Majority
Speak Out California
Students for a New American Politics PAC (SNAP PAC)
Take Back Red California
Tennessee Health Care Campaign
Tennessee Justice Center
Traction
Twenty-First Century Democrats
U.S. Student Association Foundation (USSAF)
UHCAN Ohio
Universal Health Care Action Network
USAction
VelvetRevolution.us
Verified Voting Foundation
Vote Solar Initiative
Voter Action
We Are America Alliance
Wellstone Action
Western Organization of Resource Councils (WORC)
Women's Campaign Forum
Women's Campaign Forum Foundation

Political "Mutual Funds" Update: Is Money Guaranteed?

The phones at New Progressive Coalition have been ringing off the hook this past week. It's been great for the team here to see the eagerness and enthusiasm of organizations involved in the current phase of the Political "Mutual Funds" selection process.

We are currently in the second phase of the application process. This is where organizations collect and upload their information for a complimentary PROI™ analysis which is used by the Working Group to help select the final Political "Mutual Funds" "holdings." Beyond our original PROI™ beta testers, this is the first time we’ve gone through this process with such a large group.

While so far the process has been working very smoothly, we have heard one consistent question from applicants: Is funding guaranteed for the organizations included in the final product launch?

This is a valid concern for organizations who may not want to go through this time consuming process without being certain that it will be useful to them. Although we are not able to guarantee a specific amount of money, over the past year we have listened to our customers (and focus groups), and are confident that our product will solve donors’ needs. Also, the Working Group developed the PROI™ process so that the analysis will be useful to organizations regardless of whether there is a guaranteed pot of money at the end. We believe in this process and hope that organizations will participate in PROI™ to not only better their visions and operations, but to also help us change current progressive giving patterns.

We enjoy receiving all of these calls and emails. Our products and services evolve based on feedback from our network because we believe that staying aligned with our community is absolutely critical to our success. Let us know if you have any more suggestions or insights.

NPC's Flagship Product: Political "Mutual Funds"

A lot of people have been asking us what New Progressive Coalition has been up to lately. Well, we have been busy developing our 2007 flagship product: NPC's Political "Mutual Funds." Through these funds, donors can contribute money to baskets of vetted progressive organizations and track their political return over time.

By the end of the year, we will be releasing three NPC Political "Mutual Funds" focused on:

• Making a difference in the 2008 election and building the infrastructure that supports it
• Working toward having a green planet and energy independent country
• Helping move this country toward an affordable health care system.

The first funds were decided by our working group of industry experts as well as focus groups in Denver and San Francisco. Last month, we put out an open call for effective and innovative organizations working in these three areas. We had a tremendous response rate and had over 120 organizations apply. We invited 105 organizations to move on to the next phase and undergo a PROI™ analysis which will be used by the working group to determine what organizations will be included in our final product.

Each of these funds will be diversified to include organizations from the six sectors that make the up the progressive movement and range in size, age, geographic location, and legal status.

We are thrilled to announce the 99 organizations that made it to the 2nd round and attended a Political "Mutual Funds" Orientation webinar last week:

ActBlue
AlterNet
America Votes
American Medical Women's Association
America's Agenda Health Care Education Fund
America's Agenda Health Care for All
Arizona League of Conservation Voters
Ballot Initiative Strategy Center
BlogPAC
Bus Project
BuyBlue.org
Campaign for America's Future
Campus Climate Challenge
Center for Rural Strategies
Citizen Action of Wisconsin
Citizens for Responsibility and Ethics in Washington
Color of Change.org
Colorado Conservation Voters
Commonweal Institute
Conservation Council of North Carolina
Conservation Voters New Mexico
Consumers for an Affordable Health Care
Defenders of Wildlife Action Fund
Democracy: A Journal of Ideas
Democratic GAIN
Democrats Work
dotOrganize
Drum Major Institute for Public Policy
Emerge America
Energize America
FairVote
Faithful Democrats
Forest Ethics
Forward Montana
Green Media Toolshed
Health Action New Mexico
Healthcare for All Pennsylvania
Herndon Alliance
Institute for America's Future
Into the Blue
Justice Through Music
League of Conservation Voters
League of Conservation Voters (WA)
League of Conservation Voters Education Fund
League of Young Voters
Living Liberally
Mainstreet Moms
Map the Vote, LLC
MAPLight.org
Media Consortium
Montana Conservation Voters Inc.
My Rural America Action Fund
Netroots Nation
New Era Colorado
New Leaders Council
New Voice of Business
Non-Profit Voter Engagement Network
Northwest Health Law Advocates
Ohio League of Conservation Voters
Oil Change International
OMB Watch
Opportunity Agenda
Party2Win
Progress Now
Progressive America Fund/Open Ballot Project
Progressive Majority
Progressive States Network
ProgressiveU.org
ProgressOhioEducation, Inc.
PTP: Progressive Technology Project
Rainforest Action Network (RAN)
Redefining Progress
Roosevelt Institution
Science & Environmental Health Network
Secretary of State Project
Sierra Student Coalition
Small Business Majority
Speak Out California
Students for a New American Politics PAC (SNAP PAC)
Take Back Red California
Tennessee Health Care Campaign
Tennessee Justice Center
Traction
Twenty-First Century Democrats
U.S. Student Association Foundation (USSAF)
UHCAN Ohio
Universal Health Care Action Network
USAction
VelvetRevolution.us
Verified Voting Foundation
Vote Solar Initiative
Voter Action
Voto Latino
We Are America Alliance
Wellstone Action
Western Organization of Resource Councils (WORC)
Women's Campaign Forum
Women's Campaign Forum Foundation
WUFPAC
Young People For

These organizations are receiving a complimentary PROI™ analysis and will be able to use this information in their own fundraising efforts regardless of whether they are included in our final product.

We're looking forward to giving people an easy and strategic way to make an impact.

Measure Your Impact with PROI™

Our customers told us that they are overwhelmed and overloaded by information and requests for contributions, and that they can't easily find organizations doing effective work on issues they care about most. So they don’t give.

Individuals easily understand the return on their contributions to candidates and electoral organizations because there is a winner and a loser in elections. It has been difficult, though, for individuals to understand the "value" of their contributions to progressive organizations like think tanks, leadership institutions, or advocacy organizations.

In response, New Progressive Coalition partnered with SVT Group and we have spent the past year developing our proprietary Political Return on Investment (PROI)™ methodology so that individuals can understand the impact of their progressive giving. In other words, PROI™ helps make visible to donors the currently invisible work of organizations. Our PROI™ methodology was specifically designed to help individuals improve their political investment choices and promote accountability among political organizations. Our PROI™ methodology also encourages political innovation by making individuals comfortable with taking risks on new leaders and ideas.

The PROI™ methodology quantifies data submitted by organizations across the sectors that make up a political movement, an approach aimed at breaking down traditional issue silos. The metrics and indicators developed for the PROI™ methodology were evaluated and rigorously tested by a group of leading political investors and organizations and over 600 hours were spent creating PROI™ and eliciting feedback from around the country.

Our PROI™ takes into account the best of traditional Social Return on Investment (SROI) analysis, and improves on it by simplifying the reporting requirements. Organizations are able to easily complete the PROI™ process and donors are able to digest the analysis.

Unlike traditional SROI, however, the PROI™ of an organization is determined based on an organization’s specific goals and strategies, and not against any subjective political values. In other words, the methodology helps people find organizations creating the political change they are seeking, regardless of what that change may be.

NPC is currently using PROI™ as the methodology behind our flagship product: Political Mutual Funds. More to come on these funds later this week ...